- Fourth-quarter net revenue of $100.8 million
- Full year 2022 revenue of $391.1 million, exceeding guidance
- Fourth-quarter net loss of $25.1 million and Adjusted EBITDA of $7.1 million
- Full year 2022 net loss of $52.5 million and Adjusted EBITDA of $25.7 million
- Fourth-quarter gross margin of 24.8% and Variable Marketing Margin (VMM) of 30.6%
- Full year gross margin of 26.4% and VMM of 32.7%
- Closed previously announced acquisition of HomeQuote.io marketplace and ClickDealer international ad network
Clearwater, Fla. – March 31, 2023 – Digital Media Solutions, Inc., a leading provider of technology-enabled digital performance advertising solutions connecting consumers and advertisers, today announced financial results for the fourth quarter and full year ended December 31, 2022, along with the completion of asset purchases from Customer Direct Group.
DMS serves 285 scaled enterprise customers and over 7,000 SMBs across the P&C Insurance, Health Insurance, Ecommerce, Career and Education and Consumer Finance verticals with digital performance marketing solutions.
“We are proud of our results in a dynamic operating environment, exceeding guidance for full year 2022 net revenue. Our results demonstrate the strength of our agnostic solutions, which are highlighted by the diversity in our customers and the end markets we serve. We are excited to add the HomeQuote.io marketplace and ClickDealer’s international performance ad network to the DMS ecosystem,” said Joe Marinucci, CEO of DMS. “Home improvement and related home services represent an enormous addressable market opportunity for future growth. ClickDealer’s international ad network will expand our Brand Direct business globally, allowing us to serve more advertisers and consumers in key verticals and end markets. Both businesses will continue to benefit from our proprietary technology, first-party data and expansive and agnostic media reach.”
“Diversity in both our customer base and verticals we serve allows DMS to remain agile to move as markets dictate, giving us a competitive advantage. Earlier this year, we focused on strengthening our balance sheet, which provides ample flexibility to continue to invest in our strategic growth initiatives. Given the length of the current market cycle, we continue to be diligently focused on managing our operating expenses as a major financial performance lever that is fully under our control,” Rick Rodick, CFO, added.
Additionally, DMS successfully raised new equity financing to strengthen the company's balance sheet. This financing includes participation by DMS co-founders along with strategic investors and will better position the company to execute on its growth initiatives in 2023 and beyond. For additional information, see the private placement of convertible preferred stock press release at https://investors.digitalmediasolutions.com.
Fourth Quarter 2022 Performance:
(All comparisons are relative to the fourth quarter of 2021)
- Net revenue of $100.8 million, down 15.3%
- Gross profit margin of 24.8%, a decrease of 4.9 PPTS
- Variable Marketing Margin of 30.6%, an increase of 0.2 PPTS
- Operating expenses totaled $50.1 million, a decrease of $4.7 million
- Net loss of $25.1 million compared to net income of $3.9 million
- Adjusted EBITDA of $7.1 million compared to $14.7 million
- EPS of $(0.38) compared to $(0.11)
- Ended the quarter with $48.8 million in cash and cash equivalents, and total debt of $256.8 million
Fourth Quarter 2022 Segment Performance (including intra-company revenue):
(All comparisons are relative to the fourth quarter of 2021)
- Brand Direct Solutions generated revenue of $55.9 million, down 23.1%. Gross margin was 21.3%, down from 23.7%.
- Marketplace Solutions generated revenue of $50.3 million, down 14.6%. Gross margin was 22.0%, down from 28.4%.
- Technology Solutions generated revenue of $2.3 million, down 37.4%. Gross margin was 83.4%, up from 37.6%.
Full Year 2022 Performance:
(All comparisons are relative to the full year of 2021)
- Net revenue of $391.1 million, down 8.6%
- Gross profit margin of 26.4%, a decrease of 2.8 PPTS
- Variable Marketing Margin of 32.7%, a decrease of 2.7 PPTS
- Operating expenses totaled $155.8 million, a decrease of $29.3 million
- Net loss of $52.5 million compared to net income of $6.2 million
- Adjusted EBITDA of $25.7 million compared to $58.0 million
- EPS of $(0.84) compared to $0.06
- Ended the year with $48.8 million in cash and cash equivalents, and total debt of $256.8 million
Full Year 2022 Segment Performance (including intra-company revenue):
(All comparisons are relative to the full year of 2021)
- Brand Direct Solutions generated revenue of $204.2 million, down 19.5%. Gross margin was 21.0%, down from 23.0%.
- Marketplace Solutions generated revenue of $216.4 million, down 3.5%. Gross margin was 24.1%, down from 27.0%.
- Technology Solutions generated revenue of $9.8 million, up 1.7%. Gross margin was 85.4%, up from 63.2%.
First Quarter and Second Quarter 2023 Guidance:
DMS anticipates Revenue, Gross Margin, Variable Marketing Margin and Adjusted EBITDA to be in the following ranges:
Our guidance for Q1 2023 reflects typical seasonality along with continued challenging market conditions in our P&C vertical. Q2 reflects the financial contribution we expect to realize from closing the Homequote.io and ClickDealer acquisition. We are not providing full year 2023 guidance at this time.
First Quarter 2023:
- Net Revenue: $90 – $92 million
- Gross Margin: 24% – 26%
- Variable Marketing Margin: 30% – 35%
- Adjusted EBITDA: $3 – $5 million
Second Quarter 2023:
- Net Revenue: $108 – $112 million
- Gross Margin: 24% – 26%
- Variable Marketing Margin: 30% – 35%
- Adjusted EBITDA: $6 – $8 million
Adjusted EBITDA and Variable Marketing Margin are non-GAAP financial measures. Management believes that Adjusted EBITDA and Variable Marketing Margin provide useful information to investors and help explain and isolate the core operating performance of the business — refer to the “Non-GAAP Financial Measures” section below. For guidance purposes, the Company is not providing a quantitative reconciliation of these non-GAAP measures in reliance on the “unreasonable efforts” exception for forward-looking non-GAAP measures set forth in SEC rules because certain financial information, the probable significance of which cannot be determined, is not available and cannot be reasonably estimated without unreasonable effort and expense.
Conference Call and Webcast Information:
The U.S. toll-free dial-in for the conference call is 1-844-200-6205, and the international dial-in number is 1-646-904-5544. The access code is 437128. A live webcast of the conference call will be available on the investor relations page of the company's website at https://investors.digitalmediasolutions.com.
A replay will be available after the conclusion of the call on March 31, 2023, through April 7, 2023. The U.S. toll-free replay dial-in number is 1-866-813-9403, and the international replay dial-in number is 1-929-458-6194. The replay access code is 447159.
This press release has been updated. View the updated press release here.
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